The Chair: Thank you for accepting our invitation to share with
the committee your comments, opinions and recommendations with the order of
reference that we have from the Senate of Canada. The committee is
continuing its study on international market access priorities for the
Canadian agricultural and agri-food sector.

As we know, Canada's agriculture and agri-food sector is an important
part of the country's economy. For statistics, in 2013, the sector accounted
for one in eight jobs in Canada, employing over 2.2 million people and close
to 6.7 per cent of Canada's gross domestic product.

[Translation]

Internationally, the Canadian agriculture and agri-food sector was
responsible for 3.5 per cent of global exports of agri-food products in
2013.

[English]

In 2013, Canada was the fifth largest exporter of agri-food products
globally. Canada engaged in several free trade agreements. To date, 12 free
trade agreements are in force. The Comprehensive Economic and Trade
Agreement with Canada and the EU is completed and 11 FTA negotiations are
ongoing.

That said, Mr. Boehm, we will ask you to make your presentation.
Following that, senators will be asking you some questions.

Mr. Boehm: Thank you and hello, honourable senators. I appreciate
the Senate's leeway in giving me the opportunity to speak. I was scheduled
last week but I ran into difficulties on the farm with seeding. Therefore, I
am quite pleased to have another opportunity to speak.

As many of you know, the National Farmers Union is Canada's largest
direct membership voluntary farm organization. Farmer members have to
participate directly by paying a membership fee in the organization and
decide to be members of the organization. We believe that small- and
medium-sized family farms should be the fundamental food producers in Canada
and we advocate for policies that would benefit economically, socially and
environmentally food production in this country and that would also benefit
that type of farm operation.

One of the key pieces in Canadian policy for a long time has been
international trade agreements. Indeed, we're a country with large
productive capacity and large surpluses, in general. As a consequence, we
play a role much beyond our population weight internationally in the export
markets.

As a grain producer in Saskatchewan, export markets have been important,
as well as domestic markets of course, throughout my farming career.
However, the nature of the international trade agreements, the consequences,
the power shifts and the impacts on farmers are something that we would
question.

I would like to point out that the history of Canada has been one where a
large portion of the agricultural area was formerly controlled by the Hudson
Bay Company under a grant from the British and that the creation of the
country came about through the British North America Act enacted in 1867.
Canada has fought and Canadians have fought for autonomy from various
colonizing agents over time.

Later on the Statute of Westminster in the early 1930s granted us control
over our natural resources, of which we have vast amounts. Then, finally, in
the 1980s, we repatriated our Constitution.

Again, these activities have been about power — who holds power, who
holds control, and an attempt to balance power. In the BNA Act, two chambers
were created. We have a bicameral Parliament, with the House of Commons and
the Senate. This was consciously done in order, as in other bicameral
systems, to balance power to offer the opportunity for a second look at
legislation and at directions.

Now we are now losing control of our autonomy and our democracy, we
believe, through these international trade agreements that are essentially
constitutions for international corporate players. The investor state
dispute settlement mechanisms go to arbitrators outside the country. An
assortment of intellectual property mechanisms, intellectual property
templates, of which some we have adopted, all of these mechanisms remove
autonomy from the Canadian population and ultimately to farmers as a
consequence.

The question is this: We have expanded trade drastically in this country.
Agri-food exports have gone up in value significantly, but for farmers what
have the consequences been? We have seen consolidation take place. Farm
sizes have increased drastically, including my own. We've seen debt levels
rise significantly and farm populations drop off significantly, so that now
agricultural producers make up less than 1 per cent of the population of
Canada.

At the same time, there is the a consequence of these agreements and an
abandonment of the mechanisms that were recognized a century ago in the
United States in particular and in parallel legislation in Canada, the
Sherman anti- trust, anti-combines legislation in the U.S., which sought to
break up entities that were deemed to be harmful to the general economy in
the U.S., including the breakup of Standard Oil, Carnegie Steel and an
assortment of other actions. It was recognized at that time that it was
important to maintain competition within an economy and not to allow too
much control or power to be accumulated.

What we are seeing in these trade agreements is that power is
accumulating in nearly every sector, and it is accumulating to maybe two or
three players that internationally control the trade in grains, seeds,
agricultural chemicals, fertilizer, fuels, et cetera. This sort of power has
allowed them to externalize costs onto farmers. That showed up in the debt
sheets. We see approximately 200,000 farmers in Canada shouldering $80
billion of debt.

Tantamount for those of us in the National Farmers Union, for many other
farmers and for Canadians in general is that market access and the expansion
of trade, under the terms of these agreements, should be looked at through a
lens of what are the direct benefits to the Canadian economy, and ultimately
to farmers. We see the issues of deficits in the Canadian economy. For a
nation that has such a huge surplus of production capacity, whether
agriculture, natural resources and otherwise, this is puzzling. We also see
farmers expanding in size, adopting the latest technologies and large
economies of scale shouldering more and more debt.

Again, on the one land you see a concentration and the externalization of
costs — whether it is grain companies, railways, et cetera — on to farmers,
showing up directly in farmers' debt balances. We wonder what the long-term
benefits of these mechanisms are.

. . . a Party, including its procuring entities, shall not seek, take
account of, impose or enforce any offset.''

"Offset'' is defined as:

. . . any condition or undertaking that encourages local development
or improves a Party's balance-of-payments accounts, such as the use of
domestic content . . .

Further clauses go to impact local food systems, including the
restriction on the mash sector, municipalities, academia, schools and
hospitals that are subject to certain thresholds of $110,000 at the federal
level and $335,000 at the municipal and provincial levels. With any
procurement over those values, you could not give more favourable treatment
to your domestic supplier than a party outside of the country.

There are to be no restrictions on the movement of capital, which could
subject us to drastic currency fluctuations and would also impact, at times,
our ability to trade or to export, however it might be.

The National Farmers Union is part of an international organization
called La Via Campesina that has developed a concept called "food
sovereignty'' that recognizes that trade will always be part of the
agricultural situation, but that we don't want to impact other nation
states. We feel that they should be able to determine what is culturally,
environmentally and economically important for them, just as we should for
our own purposes.

We have seen in these trade agreements, with the investor state
protection clauses, that our democracies are threatened. We can have
autonomy, but that comes at a price. If we put in regulations once these
things are in force that impact future profits, we can certainly do that but
we pay, and we pay outside of our domestic courts.

We see intellectual property mechanisms for alleged infringement where
our courts enforce for these international corporations as a consequence of
these trade agreements. For alleged infringement of an intellectual
property, whether it is plants breeders' rights, copyrights, trademarks, et
cetera, the precautionary seizure of the alleged infringers' moveable and
immoveable property, the freezing of bank accounts and other assets, and the
communication of financial data shall take place. Of course, this creates a
culture of fear amongst the agricultural community and others. In addition,
any third party alleged to have assisted in the alleged infringement would
be subjected to these precautionary seizure provisions.

Ultimately, we would ask why these negotiations, Trans-Pacific
Partnership, CETA, et cetera, are negotiated in secret? If they are
beneficial to the Canadian economy and to Canadian citizens, why would it be
negotiated with the degree of secrecy that is in place and then be presented
to us as a fait accompli at the end of the day.

In the end, we shouldn't be terrorized by missing a trade deadline. What
is to hide except that something may be unacceptable and that Canadians as a
whole have resources, food stuffs, et cetera that the world wants? Tariff
levels are low on all of these items. These international agreements,
supposedly free trade agreements giving market access, are highly suspect
and actually very harmful in the long run to farmers, to Canadians and to
our autonomy.

I will give you an example for the Europeans. Many farmers assume we will
increase our access to the European marketplace with our GM crops, for those
who choose to produce those crops. In reality, only a side letter was
communicated between the ministry of the environment in the EU to our
Agriculture Minister saying that these things would be discussed. There is
no definition in the CETA accord in that regard. Most nations in the
European context have exemptions in their annexes for a whole number of
items in this.

What farmers need, and what they are being denied in these international
arrangements and market access, may benefit certain sectors of the agri-food
system. But as more powerful players are put in between farmers and their
ultimate markets without direct access, farmers find themselves in a
position of receiving less and less for what they produce. We have studied,
over time, the adoption of innovation and increased production where it has
taken place. Farmers have not particularly benefited. Indeed, almost 100 per
cent and sometimes more of the improved production has been captured by the
suppliers of the technology.

With that, I will close my remarks and I would welcome questions,
comments and anything else that the Senate chooses to say.

The Chair: Thank you, Mr. Boehm, for sending us your presentation.
We will start first with a senator from your own province, Senator Merchant.

Senator Merchant: Welcome. The senators are very happy to hear
that Saskatoon is this thriving. You are from Saskatoon; I am from Regina. I
will say nice things about Saskatoon anyway. We only have two cities in
Saskatchewan, so there is a bit of competition between the two.

You did not make any mention about the situation with infrastructure,
particularly in moving these products. What is the situation exactly? How do
you see it from your point of view?

Mr. Boehm: I appreciate that question. Of course, for a long time,
we have had problems with rail infrastructure and constrained port capacity.

One of the problems we have as farmers, particularly in Western Canada,
is that we are about the farthest away from tidewater that any agricultural
region is, with only rail service as a possibility. Of course, we are
finding what I mentioned, this externalization of costs that has been taking
place, where farmers are forced to haul to fewer and fewer elevators longer
distances and put up more on-farm storage. We see that the port facilities
and the lack of coordination in the system, which we formerly had, has led
to a situation where (a) the control of the port facilities has become more
concentrated and (b) the railways have been capturing excessive rents for a
long time, as the lack of a costing review and an adjustment in the revenues
that they receive is taking place. We have not seen drastic improvements in
that rail infrastructure even though they are getting excess returns
significantly, over $100 million annually — according to a study some time
ago — beyond what is considered normal, generous returns on long-term
variable costs. A 20 per cent contribution rate is the North American
railway standard and they are far exceeding that.

Ports are an issue, as are elevators, roads, et cetera. The
infrastructure is being taxed to the limit. Potentially, changes in our
grading system, new grain classes and other legislation in the Canadian
Grain Commission, could see American grain start to flow through our taxed
infrastructure which is having difficulty serving us at present.
Infrastructure is an important part of this puzzle. Given the financial
constraints that farmers are receiving, including variable wheat and barley
prices at the moment — they're extremely low — it has to be accessible at a
reasonable price.

Senator Merchant: Since you mentioned prices, I will raise a topic
that is maybe a little bit of a soft spot for you. With the changes since
the Canadian Wheat Board, you talked about how the benefits are trickling
down to farmers with the low prices right now. From your point of view, how
have you witnessed the evolution of the new practices now that it has been
changed?

Mr. Boehm: The first year the board was gone, wheat prices were
relatively buoyant. Immediately after that, we ran into transport
difficulties and a collapse of grain prices, even though the port prices
were almost double throughout the crop year of what we were receiving
inland. We were having difficulty even moving the product and, even after we
paid the normal handling fees and freight rates, grain companies captured
that differential at the port, which was almost identical to what farmers
received. The coordinating ability of the CWB disappeared and we ran into
problems.

Then, we saw grain companies make as much as farmers on that crop — pure
profit, not for their services. They made their normal tariffs there on that
crop. Again, this is what I alluded to in that farmers need the ability to
directly access markets with a minimum of middlemen and international
players that would undifferentiate the Canadian brand, the Canadian product,
from anything else.

Senator Merchant: I think I will let my colleagues continue. Thank
you so much.

[Translation]

Senator Dagenais: Good afternoon, Mr. Boehm. It is a pleasure to
hear from you. I am going to make you smile. I go to the United States
regularly, and last time, I was grocery shopping with my wife at a
Winn-Dixie. We were in the meat section, and while she was checking out the
specials, I was looking at the labelling on chicken thighs and cuts of beef.
My wife was surprised to see how interested I was in labelling, but that has
only been since I have been a member of the agriculture committee.

In May, the World Trade Organization rejected the United States' appeal
concerning the amended version of its labelling policy to indicate the
country of origin. A WTO appeal body confirmed that the U.S. labelling
policy did not abide by international trade rules. So Canada was given
permission to take reprisal measures against the United States. I don't know
whether you are aware of that. If so, what do think about the decision?

[English]

Mr. Boehm: I don't have a headphone for translation, and I don't
want to misinterpret the question.

Senator Dagenais: I understand. That is okay for me.

Mr. Boehm: Would you mind repeating the question in English so
that I get it right? I'm very sorry; I do not want to make a mistake. I'll
ask the people here.

The Chair: Mr. Boehm, you should have a regular feed so that you
can hear the translation. Do you hear the translation?

Mr. Boehm: No, I do not.

The Chair: One minute, please. We will try to solve that technical
problem.

Can you hear me? Do you have the translation, Mr. Boehm?

Mr. Boehm: No.

The Chair: You don't hear any translation?

Mr. Boehm: No.

The Chair: The chair will recognize Senator Dagenais. Senator
Dagenais, would you ask your question in English? Or I could help you with
the question in English.

Senator Dagenais: When you buy your groceries in the United
States, you have a special sticker on a piece of beef or a piece of chicken,
and that is the rule for international commerce.

The United States had a problem. On May 18, 2015, the World Trade
Organization rejected the United States' appeal regarding the amended
version of its country-of-origin labeling policy. The WTO appellate body
confirmed that the United States' COOL policy international trade rules
decision authorized Canada to take retaliatory measures.

What does your organization think of this decision? Do you understand my
English with a very special accent?

Mr. Boehm: It was very good.

Senator Dagenais: Thank you so much.

Mr. Boehm: Much better than my French.

I think that the country-of-origin labeling requirements in the U.S.
probably will be an ongoing problem. The U.S. is a powerful player and used
to getting its own way, regardless of the WTO rulings.

While we have no objections to taking on COOL, it may be time that
Canadians start to think of it as an advantage in branding Canadian meat
products. If there's country-of-origin labelling, perhaps we could take
advantage of that and market our products with the Canadian brand and
attempt to turn it into an advantage rather than a disadvantage.

Senator Tardif: Good afternoon. Thank you for being here.

Mr. Boehm, you have expressed serious concerns in your presentation about
the free trade agreements that Canada has signed and that Canada is pursuing
presently. Knowing the importance of exports to our economy, what are the
National Farmers Union's proposals to improve international market access
for Canada's agri-food products?

Mr. Boehm: On the one hand, I think that everyone assumes that
increased access is important and that trade is important. We would agree.
On the other hand, again, the question was: Who are the beneficiaries of
these particular mechanisms? For a long time, we've called for agriculture
to be negotiated outside of these comprehensive agreements, and for
agriculture and food to be treated differently than other sectors of the
economy because we're subject to so many variables that are out of our
control — weather, pricing, et cetera. This is problematic in sort of an
agreement that has chapters on agriculture, et cetera, in that there are the
underlying principles that I mentioned, namely, no offsets, the impact on
local food production, no favouring of a domestic supplier, et cetera.

Regarding your question about access to international markets, I think
what we should be looking at domestically, for example, is that we have
tremendous concentration in the meat-packing industry with two companies
with90 per cent of beef and two companies with 70 per cent of pork. We do
know that premium markets exist in the world, for example in Europe where
they are looking for hormone-free beef, and that we have difficulty
fulfilling even the quota levels that are available to us right now. We
should be looking at our domestic packing industry and thinking about how we
would supply those premium markets with special runs or maybe opening up to
smaller abattoirs, in particular, to encourage farmers. They don't get
particular direct benefit because they just don't have access to those
premium markets through our current meat-packing system, except maybe on a
limited scale.

These kinds of opportunities are not being translated through these trade
agreements, which are sort of a one-size- fits-all and a kind of
standardization internationally, because of the degree of concentration that
we've allowed to be dominated by companies that are based outside of our
country in meat-packing, as one example.

One of the recommendations in our brief was that things be looked at
through the lens of the beneficial impact on farmers, community, soil, the
environment, et cetera, and that we look and cherry-pick, because
transportation is expensive. We would look at accessing those sorts of niche
markets that could be profitable.

Senator Tardif: You've mentioned in your brief, Mr. Boehm, that
trade deals feature harmonization of regulations and standards so that
global agri-business corporations can operate seamlessly in several
countries, while nations are deprived of regulatory tools to differentiate
their products in the marketplace or to create economic space within their
countries to pursue other values that are important to their citizens and
residents.

What do you mean exactly and could you give us some examples?

Mr. Boehm: Sure. For example, standardization has benefits in some
regards, but excess of standardization leads to an inability to
differentiate a Canadian brand; that is, American wheat from Canadian wheat
or from Australian wheat or beef, or whatever it might be. When you have
standardized systems and undifferentiated products, traders in those
products can easily move across borders and they're selling commodities. It
doesn't matter whether it's Canadian beef or Canadian wheat or wheat of
such-and-such a specification. They can play one country off another.

Other mechanisms — for example international seed protocols facilitating
a variety of registration systems to allow international varieties to come
into this country rather seamlessly in different food crops — can be
problematic in that ability for us to differentiate ourselves from other
trading nations.

Senator Enverga: Thank you for the presentation. I want to go back
to the earlier question with respect to your view being against more trade
agreements and you want to more or less separate the agreement from
agricultural trade. Would you rather keep the status quo at this point and
not do trade agreements at all?

Mr. Boehm: I don't think that the status quo has been particularly
beneficial, given the evolution of what's happened in the countryside.
Again, we all know farm debt levels are going up and farmers are
disappearing, particularly younger farmers. We know there's a demographic
issue.

What we would like to see conceptually is a shift away from pure volume,
dollar value-added exports to a shift towards sort of an actual benefit
relationship that translates both to the country of Canada and to farmers
directly. That isn't taking place with the status quo and it certainly won't
take place with the new trade agreements because they're about externalizing
cost onto the least powerful and that happens to be farmers. We can see a
continued round. We can increase production; we've done it. We've done it
threefold in the last decade, or maybe a bit longer in the last 20 years. At
the same time, the negative impacts continue. This is why we're calling for
a different look through a different lens as to what the consequences of
these mechanisms are.

Traditionally, so-called free trade agreements have meant to be tariff
agreements so that tariff barriers and other mechanisms don't restrict the
flow of products into countries. But these are not about that. These are
about mechanisms that make countries less autonomous and farmers more
dependent on a few increasingly powerful players in many different sectors.
Right now, we see Monsanto's bid to take over the huge Swiss firm Syngenta.

Again, there's nothing in these agreements that would limit those sorts
of things from taking place. That sort of power allows for excess rents to
be extracted from farmers. The canola example is a perfect example where
farmers are paying over $600 a bushel for canola seed, when that same bushel
that's perfectly viable as seed, when they go to sell, it is worth $10, 60
times less.

Senator Enverga: When you say you want mechanisms, you want to
keep supply management? I understand that during the negotiation for TPP,
they talked about supply management. Is that what you're saying, that we
should remain with supply management; we cannot do away with it?

Mr. Boehm: I think supply management in many parts of the world
and here in Canada has been recognized as generally a success story. Supply
management for dairy, poultry and eggs has allowed farmers to generate a
reasonable income without support from the state. Most other developed
countries in the world have been supporting agriculture through various
mechanisms — whether it's income adjustment schemes, et cetera, direct
subsidies and whatnot — because actually the markets that are generated by
these kinds of agreements don't return sufficient amounts to farmers. It's
an issue of power and control.

Supply management changes that equation. It comes with the requirement
that you don't allow outside products into the country. There are exceptions
— tariff rate quotas, et cetera — on certain items. Nevertheless, farmers
generate a reasonable income. There's no cost to the public purse.
Processors get a stable, reliable product for the domestic market.

I think it would be a huge mistake to dismantle the supply management
system developed in Canada for some tenuous benefit of Trans-Pacific
Partnership in expanding trade or market access elsewhere. I think this
would be a huge mistake in domestic policy.

Senator Moore: I'm sorry I've been late coming here, but I got
hung up on a long-distance phone call at home.

Mr. Boehm, thank you for being here. The U.S. Department of Agriculture
recently developed a voluntary certification for the labelling of
genetically modified crops. What impact do you think that new certification
process will have, and what will be the consumers' thoughts or reception or
perception of that process?

Mr. Boehm: Of course, as with many things — trade agreements, et
cetera — the devil is in the details, and I haven't had the opportunity to
carefully read this protocol.

Generally, voluntary protocols can be subverted to a certain extent. We
see, I think, a real interest on the part of food consumers to see improved
labelling, particularly around GM products. I think in the future, products
with nanotechnology should become a concern as well.

GM has been around for some time and there's been great resistance in
labelling protocols. I think the resistance partly is a fear that there will
be a reduction in demand for those products by the purveyors of those
products. Nevertheless, I, as an eater, and I think most people like to
know, based rightly or wrongly on their biases, what's in their food. So,
regarding the impact, I'm uncertain and unfamiliar with the details of that
protocol I must admit.

Senator Moore: I appreciate your answer. In the closing of your
brief today, the first recommendation is that trade and agriculture be
treated separately and excluded from comprehensive trade agreements such as
NAFTA, the Canada—uropean and the Trans-Pacific Partnership.

Has your organization been consulted with regard to those — NAFTA, CETA
and TPP — and if so, when and what was the manner of the consultation?

Mr. Boehm: We have participated in a few calls in CETA that were
put out by DFAIT, where they gave us updates of the state of negotiations.
We have not been directly consulted in terms of our opinion, but we have
participated occasionally in these update calls. The Trans-Pacific
Partnership has been much less in that regard. In general, this is one of
the problems we have with these agreements; for the most part they're
negotiated secretly and presented to the Canadian and European populations
after the fact.

We have had the benefit of receiving leaked documents throughout the CETA
process. At one point I asked Steve Verheul if the leaked documents that we
had were indeed what they were working with at that point. He is Canada's
chief trade negotiator in CETA, as you would know. He confirmed that indeed
they were. So we raised alarm bells, including speaking tours and things
about that. But in terms of direct consultation, our organization has not
been directly solicited in these negotiations.

Senator Moore: You said you participated in two calls by DFAIT.
What's a call and what's involved?

Mr. Boehm: These were conference calls where Mr. Verheul would
give updates of the state of negotiations in the CETA process. We
participated in probably more than two, maybe four of those calls.

Senator Moore: Were they consultative or advisory from his end?

Mr. Boehm: Largely advisory.

Senator Merchant: Thank you, Mr. Boehm. I had an inquiry from
someone, and you mentioned it yourself, about being interested in what you
are ingesting. When you're eating something, you'd like to know something
about it. He said, because I come from Saskatchewan, there is something you
may be able to tell me about. It's called glyphosate, I think, and it's
something we use a lot in Saskatchewan. It's a desiccant, I think, that we
use. Those things are not really on labels anywhere. We know if something is
organic or not organic. Since you mentioned that, what's that about?

Mr. Boehm: Glyphosate is the base product of what's called a
non-selective herbicide. It kills anything green. It's used widely in
agriculture. Increasingly, herbicide-tolerant crops have been genetically
modified to tolerate that. Rather than being non-selective in a
herbicide-tolerant crop resistant to glyphosate, you can spray it on your
crop and the crop survives; everything else dies, at least initially.
Resistances have started to show up in some parts of the world, and here as
well.

Glyphosate is probably the largest consumed herbicide in the world. It
comes under different trade names, including Monsanto's Roundup, which of
course the Roundup Ready GM crops have been adopted extensively.

Certain crops — canola, soybeans, corn and cotton — are the big ones in
the world.

There are others. There's glufosinate, which is known as LibertyLink,
which is another breed of genetically modified crops largely produced by
Bayer, and this is another non-selective herbicide.

Glyphosate is used extensively, not just in the early stages of crop
production. It's used as a burn-off prior to seeding so that farmers can
seed their fields without tilling them and knifing the seeds so the weeds
are killed in advance. It's also used as a desiccant pre-harvest, where
crops are forced into an early death and an early dry-down.

The promise of reduced herbicide use with GM crops hasn't exactly borne
out as promised because, for a number of reasons, glyphosate has become the
single most popular herbicide used, particularly in Western Canada but also
in many parts of the world. It has become one of the big things that has
also become very cheap, and it's directly connected to the crop production
and genetically modified seeds that are tolerant to it.

Residues are increasingly going up on food, and my understanding is the
tolerance levels are being increased because of the widespread practice of
using it, particularly just immediately pre-harvest for forcing the dry-down
in the earlier harvest of crops.

Personally, I'm not enthusiastic about that. On my farm, I refuse to do
it.

The National Farmers Union includes many types of farmers, some that are
doing this practice, but they all recognize that we need increased studies
on the long-term human health consequences of the ingestion and, of course,
the environmental consequences of such a singular widespread shift to one
particular form of herbicide in agricultural production.

Senator Merchant: Does it present any difficulty for those who are
handling it, the farmers, not those ingesting it?

Mr. Boehm: There are some new reports. I also have not taken the
time at the moment to look at it. I've been totally focused on seeding
coming out.

While in the tractor, I did hear on CBC radio an interview on a report
that's come out of the UN that there is likely a carcinogenic link to
glyphosate. They say "likely.'' There's been no definitive establishment of
this study and I have not read it.

With all of these herbicides and creations, extended-release fertilizers,
et cetera, judicious use can be beneficial in certain circumstances and
excessive use can be problematic. At the moment, I think perhaps we've
reached an excess level and that we should be undertaking independent
studies and establishing made-in-Canada regulations. However, things like
CETA and the investor-state protection clauses make that very difficult, if
not impossible, without extreme costs to the public purse. Basically, what
we get locked into is a standstill once these things come into force.

Let's just pick the example of the prohibition or the reduction of
pre-harvest applications of glyphosate for forced dry-down and perennial
wheat control. We can do that, but with these mechanisms, the investor-state
protection clauses, we would likely be subjected to international
arbitrators outside of our Canadian court system imposing fines on us for
the lost future profits of the utilization of that product. This is why we
find these trade agreements so problematic.

Senator Enverga: One of your recommendations was the excess
revenues be returned to farmers. Do you have any figures about this? What
percentage of excess revenues are you thinking of here?

Mr. Boehm: Mr. John Edsforth, a well-known analyst in rail
costing, has produced a number of reports over time analyzing the excess
contribution levels, as it's termed, or excess profits and returns to the
railways that have been taking place as a consequence of their ability to
externalize costs on to farmers. The numbers would be in the neighbourhood
of $100 million to $150 million excess revenues annually over the industry
standard, the 20 per cent contribution level that's sort of a North American
rail industry standard for profits. They define it as contribution over
long-term variable costs.

Currently under the revenue cap, when the railways exceed their allotted
cost for a given volume of grain, under the freight rate regime, that excess
is given to the Western Grains Research Foundation to undertake varietal
development research, agronomic research. We think that given that revenue
cap mechanism — nothing has been addressed in regard to this $100 million or
$150 million excess — that should be directly returned to farmers through
reduced freight rates.

Under the former Western Grain Transportation Act, where we had a costing
review every four years and the efficiency gains were shared between
railways and farmers, where the improvements in railway productivity and
cost savings and the investments that farmers made having to haul to fewer
elevators, greater distances and more on-farm storage. Every four years
freight rates would get rolled back and the efficiency gains would be shared
50-50.

For almost 20 years now — actually longer, 1992 was when the last formal
costing review that took place — the railways have captured all of those
revenues and kept it to themselves and externalized more and more costs on
to farmers.

The Chair: As we conclude, Mr. Boehm, I would have two questions
for you, and if you could be succinct in answering. I'll make a statement
and then I'll ask you the two questions.

When Canada and the EU concluded CETA, which will arguably immediately
make 93.6 per cent of EU agricultural lines and 92 per cent of Canadian
agricultural tariff lines duty-free — that is according to our agreement —
now the NFU has raised a number of concerns regarding the implementation of
CETA. I am asking you to share with the committee your three most important
concerns with that agreement.

Second, in your view, what should be done to ensure that CETA is
implemented in the best way possible? There, again, give me three reasons or
factors.

Can you please share with us your three most important concerns about
CETA?

Mr. Boehm: Sure. The first is around intellectual property rights
and the provisional and precautionary enforcement of intellectual property
rights for alleged infringement, particularly with regard to plant breeders'
rights patents and the extension of the patents.

The second one is the procurement provisions disallowing offsets, no
requirement for domestic content and anything that encourages local
development or improves the parties' balance of payments.

The third one, of course, would be this issue of procurement with regard
to not being able to favour a domestic supplier. Particularly with local
food systems, both on the European and Canadian sides, the threshold levels
are far too low and particularly problematic. In our brief, we called for
the elimination of the investor-state dispute-settlement mechanisms.

The Chair: Thank you. To implement CETA, what would be the factors
that would ensure that it would be implemented the best way possible for
Canadians? As we know, a little over 50 per cent of our agricultural
products are exported.

Mr. Boehm: First of all, we need not worry about whether we export
products or not, whether these agreements are passed or not. We exported
before and we will export during and after the agreements. I think there is
a real demand for our products.

I think that these agreements are so fundamentally flawed, particularly
the impact on our democracy and our ability to autonomously, as a nation
state, act in our citizens' public interest, that we really should open it
up and present to Canadians in the widest possible way what actually is in
this agreement and undertake consultation as to whether they find it
acceptable in any shape or form.

If some of those provisions that I mentioned were removed, it would make
it more palatable. But, given that I have read all of the drafts of these
agreements from front to back for several years now, and the annexes and
related agreements, I would not be particularly inclined to implement it at
all.

The Chair: Thank you very much, Mr. Boehm, for sharing your
opinions with us.